Why does NASCAR bar so many potential sponsors from this sport? Kyle Busch raises the issue

Sprint adds a lot to this sport, including Miss Sprint. But 'exclusivity' keeps out rivals who want to market here too, like AT&T and Verizon. (Photo: Getty Images for NASCAR)

By Mike Mulhern

mikemulhern.net

LOUDON, N.H.

The sponsorship crisis for NASCAR team owners is becoming acute, and Kyle Busch laid it all out quite clearly here Friday morning. Consider: Verizon. A company with an $89 Billion market cap. It wants to use NASCAR's Cup tour to market it's products. However NASCAR's 'exclusivity' sponsorship contract with rival Sprint bars Verizon from doing any at-track marketing or promotions. Such NASCAR exclusivity has have long been a major aggravation for team owners, because it keeps team owners from going after a number of potential sponsoring companies. AT&T is another company essentially barred from NASCAR's Cup series. And NASCAR's contracts with Sunoco keep Shell and other oil companies from doing all they might want to do in this sport. NASCAR's contract with Goodyear likewise bars rival tire companies from this game. So Verizon, after trying to do an 'end-run' around that exclusivity roadblock, by sponsoring Roger Penske's Nationwide team, is giving up on NASCAR and taking its sponsorship dollars elsewhere. That means driver Justin Allgaier is likely out of a ride, and what happens to that team is uncertain too. A number of NASCAR teams – even stars like four-time champ Jeff Gordon and two-time champ Tony Stewart – still don't have firm sponsorship in place for 2011.

The 'official' fuel of NASCAR: Sunoco. With some 'exclusivity' rights that keep rivals at bay (Photo: Getty Images for NASCAR)

And Busch says he'll probably have to shut down his NASCAR Truck team at the end of the season for lack of adequate sponsorship. Is it time for NASCAR executives to scrap this 'exclusivity' thing and open the sport up to any companies that want to bring in sponsorship dollars? That would seem to be a no-brainer.

But Mike Helton, the NASCAR president, points out that 'exclusivity' is limited to a very few categories: "In a very, very, very select few categories," Helton says. "Like series sponsor (Sprint), fuel (Sunoco), tires (Goodyear). "The rest of it, look how open it really is. "Yes, there are some exclusive categories, which are for the good of the sport. Sprint pays a lot of money for the point fund, Nationwide pays a lot of money....and Sunoco. "They deserve that protection. "On fuel, we have worked with Sunoco to make that as flexible as we can make it. "Goodyear tires.... "Sprint is our series sponsor; they are the ones who stepped up and said 'We want to be your series' sponsor.' "Those areas of exclusivity are very limited, very small in the scheme of things. "There is a lot of openness out there. There are a lot of opportunities still out there." Justin Allgaier: losing Verizon as sponsor may hurt his Nationwide driving deal with Roger Penske (Photo: Getty Images for NASCAR)

Busch says if he's forced to shut down his Truck operation, "I think it's going to be pretty detrimental, to not have me in the series." Busch after all is the most prominent Truck racer. The Truck series Busch says is struggling: "There's a lot of guys struggling to find funding. "I know a couple guys out there that put sponsors on their trucks for almost a whole year for (only) $250,000 to $300,000." Running a top-notch Truck team is typically a $1.5 million venture. Some top Nationwide teams have $10 million a year budgets. And top Cup teams have budgets of $25 million to $30 million a year. Maybe it's just American capitalism at work, but Busch says teams that are trying to run the national Truck tour for $300,000 or so isn't good for the sport: "That's just killing the Truck series. You can't do that. (and survive.) "For me, it's hard, it's very hard.

"And look at Tony Stewart – he's got to find half of a (Cup) sponsor for next year. "Jeff Gordon has got to find something for next year. (DuPont is cutting back on its sponsorship, and Wal-mart has rejected sponsorship overtures.)

"Mark Martin -- they have 'hendrickcars.com' (on the quarterpanel). That's not a sponsor; that's Rick Hendrick putting his money on that car. "You look at a bunch of the Nationwide cars....(without sufficient sponsorship). "It's all across the board. "Kevin Harvick has been struggling trying to find (sponsorship) stuff for his Truck program too. "It's unfortunate the way the economy is. "It's going to be difficult for us race teams to stay in business without sponsors on our Trucks or our cars. "It's bad for the race teams to have to work through so many hoops in order to get a sponsor. "For instance: I can't thank Sprint enough. They do a great job for what they do for the Sprint Cup Series...but it locks out Verizon. It locks out AT&T. It locks out any other telecommunication company that you could try to get in. "The tobacco debacle now with the United States government, that's locked out people that have the money to do it. "The people that have the money to do it, can't or don't want to do it. "The guys that want to do it don't have the money to do it. "You're fighting two avenues there, and being an owner and being able to talk to all these guys, I'm finding that out."

Kyle Busch has a new good bud here -- Warren Buffett (Photo: Getty Images for NASCAR)

And Gordon's own view of his personal sponsorship dilemma: "I certainly would like to see us with a sponsor that could be really good for our organization...good for the sport, and good marketing, and wants to be a part of our program and get behind it. "But right now my focus is on driving, and trying to be as good as we can be in the chase. That is pretty much the message that has been sent to me through Rick (Hendrick) – Don't worry about it. "We have got a lot of people working hard on it, and it'll come together. "The Wal-Mart thing was a little disappointing, because I feel everybody was wanting to see that company in this sport for a long time, and we would have loved to have represented them. "But I'm so excited to be involved with DuPont and Pepsi and sponsors that we have had for a number of years. "I think we still have some things that are going to come together."

Shell, Kevin Harvick's sponsor the last three seasons, and moving to Roger Penske's team next year, has to walk a fine line in its NASCAR marketing because of NASCAR's 'exclusivity' contracts with Sunoco (Photo: Getty Images for NASCAR)

This is not a Mulhern column. This is Kyle Busch venting about not knowing how to run a race team. You should have asked who he couldn't land as a sponsor because there's no way he was pursuing a telecom or fuel sponsor. Newsflash: finding sponsors in this economy is tough. Mike Helton is right. Exclusivity is very small. Kyle needs to hustle on the business end. He's a great driver, but this talent does not extend to business. Yet.

okay, okay, so it's not great. and mike is right about exclusivity. but i do think nascar needs to rethink some of this stuff. not sure how, since they've got contracts in place. one of my questions is why does at&t have so many ads on NASCAR's TV races, and Sprint doesn't have many at all. and why doesnt sprint use all its urban shops to get some point-of-impact marketing on nascar -- with every driver having a standup cardboard cutout....but business....hey, this is mikemulhern.net, and i'm still trying to figure out business myself, lol....

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With all due respect Mike, you should have interviewed a real team owner, not KB. It's been obvious since day one that he has no clue what he's doing as a team owner. Not paying his contractor, ending up being sued but the GC and subs for payment, not knowing how to run it, not knowing how to get sponsors. With his typical arrogance, he thought he could just 'do it' and he'd be successful. Follow up this interview with one with Tony Stewart, Roush, Hendrick, someone who's making it work by WORKING at it, not whining and crying about how it's not so easy. Poor little shrub. I feel so sorry for you (NOT). And I think the truck series would be WAY better off without you, you are so damn arrogant it's hard to even fathom.

If this isn't a good ole boy sport anymore ,with no tabacky sponsors and such---where are the craft beer brewers or vineyards or Rolex (they are in racing)? Seems to me if we have truly moved into the mainstream Apple, Microsoft anc other "big buck" corps should follow Go Daddy's lead and see the forest for the trees.

If these drivers didnt want million dollar homes, helicopters and airplanes maybe sponsors would be willing to come on board. Jack Roush and FORD motor company have had an business venture for year I.E. "Roush Mustang" It takes more to operate Richard Childress Racing than it does to run Emerson Climate Technologies which is a sponsor of RCR. The Only Racer that lives up to racing because he loves it. Is Conrad Kalitta. His company has been on the side of his race cars as primary sponsor for years (R.I.P. Scott, we miss ya) The fans Have voted and the did with their wallets and when the so called experts in these racing series wake up(in the unemployment line) we can get back to enjoying full fledged racing.

Helton is wrong - the series sponsor etc. DO NOT DESERVE protection because it's saying they can't compete with other sponsors. The exclusivity argument is not as small as Helton is pretending it is - the sport is NOT supposed to shut out ANY other sponsors, they are supposed to be COMPETING against each other in the sport. If it were as small as Helton pretends then there would be no sponsorship issues.

This is especially true with tires, as Firestone and Hoosier are needed because too few teams are getting a legitimate deal on engineering and revenue, and the sport wonders why there is a closed loop in the competition with no new winning teams and no new winning drivers after a fluke spurt in 2009.

Helton is wrong and needs to be called out as such. Drop exclusivity deals and open it up for anyone to sponsor a car or provide revenue and engineering to multiple teams.

The only one of those that should be protected is the series title sponsor. The tire and fuel sponsorships should be wide open, mainly because those are the two main types of sponsors that are most interested in appealing to race fans. NASCAR can still say "Sunoco is the official fuel of NASCAR" and "Goodyear is the official tire of NASCAR", but they should not keep out Citgo, Shell, Valero, Exxon, Firestone, Bridgestone, Hoosier, and other fuel, oil, and tire companies by restricting their sponsorship opportunities. I'm okay with entitling Sprint to have exclusivity because they are ponying up the major cash that funds the series. The others are not putting up major dollars, and they are forcing some deep pockets away from teams that really need them.

Yes it's a bad economy, but don't you think Sprint paid TOP dollar for exclusivity? Give and take. After all, they're not just a car sponsor, but the WHOLE FRIGGIN SPORT. Why was marlboro never in nascar? Oh yeah, Because Winston was the Cup Sponsor for 30 years through several recesssions. c'mon. Think.